When should charities reject donations?

Charities in the UK are created with constitutions – the section of their governing documents that sets out the charity’s purpose. Accepting donations allows charities to carry out their purpose. So accepting rather than refusing donations must be a charity’s default position.

There are some exceptions to this rule, including provisions for charities to make values-based decisions on whether or not to accept a donation. 

Rejecting donations for legal reasons

Charities can and should reject any donations that could break the law in some way. Examples might include:

• Donations that could be the proceeds of crime and would breach the Proceeds of Crime Act
• Donations that might be considered a bribe under the Bribery Act. These are donations that are used to coerce someone at the charity to act improperly or as a reward for acting improperly
• Donations made with conditions that might breach the Equality Act. For example, a request that funds are not spent on projects with LGBT+ communities

Rejecting donations for moral or values-based reasons

A charity might also choose to reject a donation when the risk of accepting it would outweigh the value. This is most likely to happen when the potential donor represents a conflict with the charities core values or moral standpoints.

US mental health charity, This is My Brave, chose to reject a donation from Jamie Lynn Spears from sales of her upcoming book, ‘Things I Should Have Said,’ due out in January 2022.

Britney Spears fans protested the donation on the grounds that Jamie Lynn had not spoken out against the conservatorship that her sister Britney was under.

Save the Children rejected a £750K donation from oil and gas company Neptune Energy as part of its policy not to accept corporate donations from this industry. They changed their policy on donations from the fossil fuel sector following worldwide protests, led by children, on how the climate crisis will affect their future.

Returning a donation

Before a donation has been made, a charity’s trustees have the authority to reject it. Once the donation has been made, the authority to return it may move to the Charity Commission or the Charity Commission for Northern Ireland. 

According to the fundraising regulator, unless a donor correctly exercises their right to request a refund, donations should only be refunded in exceptional circumstances.

Charities should carry out due diligence appropriate to the size and nature of the donation and keep a record of why the refund was made.

In England and Wales, under some circumstances, the Charity Commission may need to provide authorisation for the refund. Charities should check with the Commission before issuing a refund.

In Northern Ireland, the Charity Commission for Northern Ireland can sanction the decision made by the charity.

In Scotland, charities governed by OCSR cannot authorise refunds as ex-gratia payments as there is no provision for them. Charities are advised to seek professional legal advice if they are considering a refund in exceptional circumstances.

Donations policies

Documenting the situations where donations will not be accepted and who has responsibility for making decisions on the refusal or return of donations as a policy helps everyone know where they stand.

A charity’s donations policy should relate directly to its constitution, setting out the charity’s values and explaining the circumstances when donations might be refused in relation to those values.

The policy should clearly state who has decision-making responsibility for rejecting donations.

Trustees have the legal authority to reject donations, but can choose to nominate a person or committee within the charity to take decisions on their behalf.

When creating a policy you might want to consider:

• Business sectors working in a way that is contrary to your charity’s core values
• The size of donation that would represent a risk to reputation
• The different types of donation eg. a personal donation from a CEO vs a corporate donation from their company.
• Whether donations to emergency appeals should be treated differently
• How to handle anonymous donations
• Any differences in the treatment of solicited or unsolicited donations
• Whose opinions will be heard as part of the decision-making process
• Who has the authority to make the final decisions on rejecting donations

Making your donations policy publicly available helps to give donors, staff and the public clarity on when you might refuse donations.

Resources

The Fundraising Regulator’s Code of Fundraising Practice includes a section with guidance on refusing and returning donations.

The Chartered Institute of Fundraising has produced a full guide on, ‘Accepting, Refusing and Returning Donations’.

The Charity Commission has specific guidance on refusing or returning donations.

You can see how Save the Children’s decision to refuse a donation was made in line with their publicly available donations policy.